Lucent’s Questions & Answers On Alcatel Merger

Impact on Employees

General

It is too early to
tell. Those types of decisions will be made during
the transition planning process, and will be
communicated after the close of the merger.

We will have an experienced transition team with
members from both companies. The role of this team
will be to plan the structure of the combined
company, as well as to ensure the timely and proper
execution of the integration of both companies.
(5-8-06)

Workforce Reductions

What will be the workforce reduction?
Where?

We expect approximately 10 percent
reduction in the global work force for the combined
company across the businesses and regions. We will
take a fair and balanced approach, conducting a
thorough analysis of our global workforce. We will
take into account the needs of each business and of
each marketplace, to ensure we are best positioned
to serve our customers' needs, while achieving a
competitive cost structure. We intend to maintain
the appropriate workforce level to do that.

After these initial job reductions, this
combination should create a growing, global and more
stable workplace for our people by building the
world's leading communications solutions provider.
We would expect that these combined businesses would
enable us to do more for our customers, our
investors and our people.
(Company response, 4-2-06)

How can you take a fair and balanced
approach when you consider the fact that it's almost
impossible to lay anyone off in France? What if the
majority of the 8,800 job cuts have to come from
Lucent?

So to the question about it being
impossible to cut jobs in France; I would say that's
absolutely flat out not correct. If you look at the
reductions that Alcatel has taken as a company and
the number of jobs they've reduced in France, I
would venture to say it's probably equal to what
we've done as a company. Now the processes are a bit
more rigorous, and it may take a little bit longer.
But nobody should conclude that we will make our
decisions based on do-ability. We're going to make
the decisions based on what's in the long-term best
interests of the company because there really isn't
a country in this world that you can't reduce jobs.
It's just a matter of how long does it take and what
do you have to do to do it. So concluding that all
the reductions will come from Lucent is flat out
wrong. And concluding that there can't be any
reductions in countries where it's tougher, is also
flat out wrong. (Pat Russo,
All-Employee Broadcast, 4-4-06)

As we've seen in the last few weeks,
it's very difficult to lay off people in France. So
this 10 percent that you're talking about, is that
going to be equally distributed between the
companies or is 90 percent of it going to come from
Lucent?

At this point in time, I can't
tell you I know exactly how the spread's going to
take place. At a macro level, we did a bunch of
analytics to get to the roughly 10 percent. In my
mind, the way we should do this is based on the
business. Where the opportunities are to synergize,
where the opportunities are to be more efficient,
where the opportunities are to capitalize on savings
opportunities — that's where we should take actions
to get the synergies. I always say it's the
operational actions that really generate the
financial results. So, you're asking me to give a
financial result, but in my mind what we need to do
right is take the operational actions. If we get the
operational actions right, then the results will
take care of themselves.

This is a global company. This combined company
is a global company. My guess is there'll be
synergies that are spread, but in terms of what the
mix will be, what the percentage will be, I can't
say. But let me just give you some financial facts.
Alcatel has roughly 10,000 employees today in North
America — 6,000 employees are in the U.S. They have
7,000 employees in China. Just to give you a feel
for the diversity, the broad geographic diversity of
that company. So when you work in a business with
opportunities to synergize, by definition where are
the opportunities? Well, they're where the business
is done and where the resources are. So you have to
believe there'll be opportunities globally relative
to synergies. But in terms of what the spread will
be, I'm not prepared to say. It's too early.

The one other thing I'll say, though, is, in
terms of how you get synergies, you don't want to be
taking a lot of synergies in low-cost areas. You
want to bias the higher-cost areas in terms of
maximizing value, so clearly that'll be a
consideration as we work our way through the
process. But really, what will drive it is the
business decisions, and based on those business
decisions we'll see the output that'll generate the
financial results. (D'Amelio,
Town Meeting, 4-3-06)

When do you expect to identify/announce
the workforce reductions?

As we have
said, we expect to close the merger transaction in
six to 12 months. Once the transaction is closed, we
expect a substantial majority of the restructuring
and job reductions to be completed within 24 months.
(5-8-06)

Compensation and Benefits

Will we see changes in our benefits,
401(k), holidays, vacations, pensions, stock
options.

For the time being, the answer
is "no." We're going to operate between now and
closing as two separate companies. When the two
companies get together, we will look at, are there
things that we do that can be applied more broadly?
Are there things they do that can be applied more
broadly? But, one of the things we looked at as part
of due diligence was overall compensation and
overall benefits. Although some of the piece parts
are different, the overall comp structure, wasn't
all that different. Clearly I think there will be
opportunities to leverage each other's, I'll call
it, "best things" in a way that's beneficial to all.
(D'Amelio, Town Meeting,
4-3-06)

What does the merger mean to my 401(k)?
What does it mean to our employee stock options?

When you look at these kinds of combinations, there
is a whole host of legal, financial structuring that
goes on with parent companies and subsidiaries and a
whole set of things we will not take you through,
that cares for these kinds of things. As for
options, as this deal closes, options in Lucent will
be converted into the security of the new combined
company, and all the exchange ratios, etc., that
affect that. (Russo,
All-Employee Broadcast, 4-4-06)

What happens to Lucent stock that
employees hold in their 401(k) plans?

The
stock will be treated the same as all other shares
of Lucent stock in that they will be converted to
stock of the combined company at the agreed upon
exchange ratio. It will continue to be managed
through Fidelity Investments.
(Company response, 4-2-06)

Are you going to give employees options
in the combined company?

The intent is to
continue providing our employees with competitive
compensation and benefit programs including a stock
option program. (Company
response, 4-2-06)

What type of severance packages will
people receive? Will the same type of package be
offered to Lucent employees as to Alcatel employees?

The Merger Agreement provides that the existing
severance benefits for both companies will remain in
effect for two years following the close of the
merger. (Company response,
4-2-06)

Union Contracts

In the United States, how many of
Alcatel and Lucent's employees are represented by
unions and what are the unions that represent the
employees?

Approximately 2,900 of
Lucent's active employees are represented primarily
by the Communications Workers of America (CWA) and
the International Brotherhood of Electrical Workers
(IBEW). There are no Alcatel employees in the U.S.
represented by a labor union.
(Company response, 4-2-06)

Will Alcatel honor the remainder of the
CWA contract?

The contract continues as
is. I want to just broaden it and say that answer
applies to the CWA and the IBEW. The contract we
have now continues to apply between now and signing
or closure. And then once we close, those contracts
stay in effect. (Frank
D'Amelio, Town Meeting, 4-3-06)

Impact on Retirees

Pension Plans

How can my pension be secure if Alcatel
is a foreign company? How do I know that there will
be a pension?

The pension obligations of
Lucent will continue to remain with the U.S. entity,
that is currently Lucent. That legal entity will
remain. Those obligations will remain part of that
legal entity. From a pension perspective, the
obligation to those pensioners remains the same,
it's that same legal entity that exists today.
That's the way to think about it.
(D'Amelio, All-Employee
Broadcast, 4-4-06)

Regardless of where a company is incorporated,
the company, the subsidiary, in the operations of
those companies, has to abide by the laws of the
countries in which they're doing business.
(Russo, All-Employee
Broadcast, 4-4-06)

We should also talk about the asset-side of the
equation. The assets in support of these plans are
held in trust for the benefit of the plan
participants, and that doesn't change. And, there's
no access for someone to come in and strip out the
assets that support these liabilities.
(John Kritzmacher,
All-Employee Broadcast, 4-4-06)

And the assets exceed the liabilities.
(D'Amelio, All-Employee
Broadcast, 4-4-06)

Do you have a plan to communicate in a
meeting or a series of meetings, e-mail or paper
communications with the Lucent retirees to answer
their questions about how their benefits and
security will be affected?

Yes, we will
be communicating. I spent some time in the
presentations I did yesterday making sure everyone
understood from a pension standpoint, our pensions
are adequately funded. Nothing changes with regard
to pension benefits or the pension plans or the
responsibilities we have in that regard will
continue to be overseen from a U.S. ERISA law
standpoint. So if you take a step back from a
retiree standpoint, one could look at this and say,
I am the retiree of a company that will be becoming
larger with greater scale, greater scope, greater
ability to compete and greater financial capability.
From a pension standpoint, nothing really changes.
And then from a retiree health standpoint, the issue
of retiree health is an issue that has to do with
rising costs of health care and what's affordable.
And just as we have said that we have to look at
what the costs are, balanced in a way with what's
affordable, we will continue to have to do that. So
from my standpoint, there really is not a change
other than the fact that this company will be part
of a larger combined company that's got more scale,
more breadth and more capacity.
(Russo, All-Employee
Broadcast, 4-4-06)

We can do things together that we can't do on our
own. That includes that $1.7 billion of synergies.
Financial success in a company benefits all
constituents of the company. So it benefits our
shareholders, our bond holders, our customers, our
employees, our retirees, all constituents. So we are
positioning ourselves for what I'll call extreme
financial success, and all constituents of the
company benefit when a company is successful
financially. (D'Amelio,
All-Employee Broadcast, 4-4-06)

Will the new company take over pensions
commitments of Lucent?

First, let us
point out that Lucent's pension funds remain well
funded under the federally mandated ERISA rules.
Lucent will become a subsidiary of a larger parent
company after the merger, and will remain the plan
sponsor of the Lucent pension plans. Accordingly,
the transaction will not result in any change in the
pension commitments of Lucent.
(Company response, 4-2-06)

On the Lucent-Alcatel Merger FAQ page,
the following statement is made about the "pension
plans": And the assets exceed the liabilities. (D'Amelio,
All-Employee Broadcast, 4-4-06) However, there are
rumors that the management pension plan is
underfunded while the non-management pension plan is
overfunded, and adding the two together, indeed
"assets" do exceed "liabilities". Can you address
the status of the individual pension plans, and if
one of the plans is underfunded, what are the plans
to address that and is the pre- or post- merger
company going to do that?

While our U.S.
management pension plan is under funded on a GAAP
(Generally Accepted Accounting Principles) basis, it
is fully funded on an ERISA basis. This means there
are more than enough dollars to provide for every
liability expected under the pension plan using the
rules the U.S. Congress has set out, and we are not
required to make any contributions to that plan.

Our U.S. occupational pension plan is overfunded
on both a GAAP and ERISA basis.

After the pending merger, Lucent will become a
subsidiary of a larger parent company, and will
remain the plan sponsor of the Lucent pension plans.
Accordingly, the transaction will not result in any
change in the pension commitments of Lucent, and
Lucent will continue to meet its pension obligations
consistent with federal requirements.
(5-8-06)

Health Care for Retirees

Will the combined company continue to
subsidize retiree healthcare for Lucent's retirees?

In the combined company, we will continue to manage
the cost of U.S. retiree healthcare. We are always
looking at how to balance the needs of our retirees
with funding levels that would enable to company to
remain a viable competitor. Our goal is to be able
to provide access to quality healthcare plans at a
level of subsidy that the company can afford.
(Company response, 4-2-06)

The Transition Period

General

When will we start defining our product
portfolios, especially where there are overlaps?
What does this merger mean for Lucent Access and
UMTS?

We will undertake a rigorous
technology-by-technology, product-by-product review
of both portfolios. We will look at several things,
such as the impact on our customers if we make any
changes, which product or technology has the most
promise going forward, what areas are likely to have
the most growth, the investments require, etc.
Beyond this, it is too early to tell.
(5-8-06)

How can we assure our customers that
their investment will be protected after a
Lucent-Alcatel product rationalization? What should
we tell the potential customers about Lucent's
future product direction when asked about the
merger?

Clearly, we want customers to
know that our relationships with them will continue
to be a high priority and we remain committed to
providing the same level of responsiveness and
service continuity that we do today.

If and when the two companies merge, our mutual
goal will be to stand by our commitments to existing
agreements across all product lines. And we intend
to honor our product development commitments in
contracts with new customers. It's envisioned that
the merged company will create the opportunity for
increased joint investment in strategic product
areas and align on common product roadmaps in line
with market demand. (5-8-06)

How do we see this affecting our partner
relationships with third party equipment
manufacturers? Specifically, I am thinking about our
relationship with Juniper Networks.

Both
Alcatel and Lucent highly value the relationships
they have with their respective partners. The
combined company will conduct a thorough analysis of
it partner relationships, as well as have
discussions with its partners to determine what is
best for the combined company.

As for Juniper, Lucent will continue to install
and maintain Juniper equipment as an integration
partner. The multi-vendor deployment and maintenance
services businesses remains core to Lucent's
portfolio. (5-8-06)

Employee Focus

What does this mean for the day-to-day
operations; for critical projects we are doing right
now?

The way to think about this for
right now is we are two separate, independent
companies. And we are to continue to operate like
two separate independent companies. We're going to
compete against each other for business. We want to
win every dollar of business that we can. The
programs that we're currently working on, we will
continue to work on. We are two separate,
independent companies — and that's how we want to
continue to behave.

In terms of integration, we can do planning. We
cannot do any implementing. Between announcement,
which was yesterday, and close, which we're ball
parking at six to 12 months, we can plan
integration. We cannot implement anything. No
implementation takes place until we close. In the
interim, our job is to execute, execute, execute.
All the things we're working on, continue to work
on. (D'Amelio, Town Meeting,
4-3-06)

Why did Lucent hire a new CIO now? With
the looming merger with Alcatel, the IT organization
is sure to be looked at for duplication of effort.
Couldn't Lucent survive without a CIO for 6 months
to a year?

The merger isn't expected to
be completed for the next six to 12 months, and in
the meantime we have a business to run. Managing our
IT systems is critical to the smooth operation of
our business, and we need a strong, experienced
leader in this position to ensure that and to help
us determine how we would integrate the two systems
once the merger is complete.

Elizabeth Hackenson, who previously held a
similar position with MCI, has more than 25 years of
experience in information technology with the last
12 years in the telecommunications industry. She is
now responsible for the operation of the company's
information systems infrastructure, including global
communications systems, corporate networks and
e-business platforms.
(5-8-06)

Will there be a recruitment freeze?

We want to be as proactive as we can in managing our
workforce through reduced talent acquisitions from
outside Lucent during this transition period, but we
are not declaring a recruitment or hiring freeze. We
have implemented a "Critical Hires Only" policy with
respect to hiring external candidates for open
positions. This policy is effective immediately and
will remain in place until further notice.

What this means is that all new job requisitions
to be posted externally need the approval of a
Management Committee member before the job ad is
posted. For job ads already posted externally, MC
member approval must be obtained before a job offer
is made to an external candidate.

This policy change does not impact internal
movement of existing employees. Professional
development remains a priority for our employees and
promotions and/or lateral moves throughout the
organization remain open to all eligible employees
per the existing policies.

Business Simplification Initiative

I understand that it's business as
usual. What about our efforts with regard to
centralization and simplification that requires IT
investments?

We start out with: We
operate as a separate company, and we keep starting
out there, and that's what drives our efforts
day-to-day. I think the one consideration there
would be is if we're thinking two to three years
out. (D'Amelio, Town
Meeting, 4-3-06)

What are the limitations placed on the
companies during the interim period?

The companies will continue to operate their
businesses independently in the ordinary course
until they receive the necessary approvals and
complete the merger. (D'Amelio,
Town Meeting, 4-3-06)

The Combined Company

General

Will English be the official corporate
language?

Yes.
(5-8-06)

Will the financial reporting for the
merged Lucent-Alcatel company be done in Euros or
U.S. Dollars?

Under International
Financial Reporting Standards (IFRS), the new
company will report in Euros. For reconciliation
purposes under United States Generally Accepted
Accounting Principles (US GAAP), the new company
will also report in U.S. dollars.
(5-8-06)

Revenue Growth

With a broader product portfolio and
resources now available with the merged company, how
do you see that impact on revenue growth going
forward compared to the single digit growth that
we've experienced in the past?

We haven't
made any projections about revenue growth. And given
that we're in a quiet period, I have to be real
careful with numbers. Here's the way to think about
it. The $1.7 billion that I just alluded to has no
assumptions on revenue synergies. That is entirely a
cost synergy number. There are clearly lots of
opportunity for each of us to pull through each
other's products. They do certain things like in
their enterprise business, for example, where they
have a strong enterprise business outside of the
U.S. and are very much trying to create a good
enterprise business in the U.S. There are things we
can do to help them. If you look at the embedded
bases that both companies have, clearly, it's an
opportunity for additional revenue upside. So the
opportunities based on geographic footprint, on
customer reach, on the embedded base that these two
companies have for increased revenue growth is
clearly significant. And we assumed none of that,
none of that in the synergies that we communicated
over the last couple of days.
(D'Amelio, Town Meeting,
4-3-06)

I have a question on the growth side. I
was just wondering what their applications business
is like and where you see that headed?

Let me bump it up a level, talk about next-gen, and
in particular IMS. And then as part of that, I'll
talk about applications. I'll do it
business-by-business, and talk a little bit about
what we do that's similar, and then what they do
that's a little bit different than what we do.

They have a similar IMS vision to ours, which is
to break apart the old circuit switching business
with separate network elements — the gateways for
signaling, for call control, section control, and
then the applications that ride on top of that. Very
similar to us in terms of architectural thought
process, what they're doing, what their portfolio,
and how they're going to market. They think about
applications very much the way we do, in terms of
next-gen revenue opportunities to create value for
the company. They are very bullish on applications,
and are investing in applications. It's similar to
our applications business. We bundle applications
with one of our segments, and it's a business where
we've made some progress, but there's lots of
opportunity for us, on the upside, but the same
thing for them. They've made some good progress, so
lots of opportunity for them on the upside. But if
you think about it in terms of our IMS next-gen
picture, there is a significant opportunity for both
companies, and leveraging them together, you get
this one plus one equals much more than two.

While I'm on this, let me just spend a minute or
two on how they're organized. If you think about
Lucent, we're organized in four segments, there's
the Mobility segment, multimedia networks, converged
core and services. And then the fifth segment is
"other," which is primarily some of the corporate
center expenses and sales and IP revenue and things
like that.

If you look at how Alcatel does their external
reporting, they have three major segments, and then
of course an "other." But if you look at the three
major financial segments, their segments are:
Mobility, Wireline, and then private networks. Now,
their Mobility and Wireline networks are very
similar to ours. But what they do in theirs that is
different than ours are primarily two things. Their
services are in the Mobility and Wireline segments.
That's different than us. Our services are all part
of our services segment.

And the other big difference is that they still
do their own manufacturing. Each of those segments,
Mobility and Wireline, has manufacturing.

They also have a private network business, which
is an interesting business with four sub-businesses.
They have a satellite business. They have a
transmission signaling business — think about
subways and railroads and our E-ZPass. They don't
sell the E-ZPass device but the network that
supports that is one of the businesses that they're
in. Then they do some network integration services,
which is similar to ours, but they do that for what
they call enterprise verticals — railroad, energy.
And their enterprise business — they still have a
PBX and IPPBX business, like Avaya. That
private-network business is a big business; it's
almost €5 billion. (D'Amelio,
Town Meeting, 4-3-06)

Employee Levels

How many employees will the combined
company have?

At the end of 2005, Alcatel
had 58,000 employees and Lucent 30,200. The
combination is creating a workforce of about 88,000,
before any restructuring plans.
(Company response, 4-2-06)

What is the combined employee breakdown
by region?

Alcatel (approximately)

Europe= 33,500 (58 percent)

North America = 9,000 (16 percent)

Rest of World = 15,500 (27 percent)

Lucent (approximately)

Europe = 4,700 (16 percent)

North America = 17,900 (59 percent)

Rest of World = 7,600 (25 percent)

Combined (approximately)

Europe = 38,200 (43 percent)

North America =26,900 (30 percent)

Rest of World = 23,100 (26 percent)

(Company response, 4-2-06)

Market Position

Will this merger make the merged company
the world's largest telecom supplier?

Yes, the merger will create the global leader in
communications technology. The merged company will
be No. 1 in wireline and No. 2 in Mobility, No. 1 in
3G Spread Spectrum (CDMA+UMTS) and No. 2 in
worldwide services. (Company
response, 4-2-06)

What would be the global competitive
positioning of the merged company?

Alcatel and Lucent's products and markets are
complementary and will create:

The Deal

When was this merger first considered
seriously by either Lucent or Alcatel?

Like everyone else in the industry, Alcatel and
Lucent continuously had informal discussions and
exchanged views on the future of telecom. More
strategic discussions earlier this year ultimately
resulted in this agreement.
(5-8-06)

Rationale for Merger

Why are Lucent and Alcatel merging?

The primary driver of this combination is to
generate significant growth in revenues and earnings
based on the market opportunities for
next-generation networks, services and applications,
while yielding significant synergies. The combined
company's increased scale, scope and global
capabilities will enhance its sustainable shareowner
value from year one. This combination is about a
strategic fit between two experienced and
well-respected global communications leaders, who
together will become the global leader in
convergence.

What these companies can accomplish together far
exceeds what we could do alone. The combined people,
capabilities and customer relationships will enhance
our competitive standing in the high-growth areas of
next-gen networks:

3G wireless

IMS

Broadband access

Optical

Applications

Services

A combined Alcatel and Lucent will:

Be global in scale

Have clear leadership in next-generation
networks as the global leader in convergence

Boast one of the largest R&D capabilities
focused on communications

Employ the largest and most experienced
global services team in the industry

Create sustainable shareowner value with
ownership in the most dynamic, global player in
end-to-end communications solutions
(Company response,
4-2-06)

Merger of Equals

Q: Why are we calling it a merger of
equals when Alcatel is getting approximately 60
percent and Lucent is getting approximately 40
percent?

It's important to remember that
there are other factors that make this a merger of
equals besides share distribution. The new combined
company will be incorporated in France, with
executive offices in Paris. The North American
operations will be based in New Jersey, where global
Bell Labs will remain headquartered.

Serge Tchuruk will be the non-executive Chairman,
and Patricia Russo will be the CEO. In addition, an
experienced international management team will be
combining equally the best of both companies.
Additional organization and management team
announcements will be made at a future date.

The board of directors will have equal
representation from each company, including Serge
Tchuruk and Patricia Russo, five of Alcatel's
current directors and five of Lucent's current
directors. The board also will include two new
independent European directors to be mutually agreed
upon.

We believe that this is the best, unparalleled
combination taking into account the unique and
complimentary strengths brought by each company.
(Company response, 4-2-06)

Completing the Merger

What are the hurdles and milestones in
order to complete the acquisition? And is there any
possibility that this may not get to completion?

You have the classic approval process with respect
to the regulatory authority. That would be the U.S.
regulatory authority, the European union regulatory
authority. We will go through CFIUS (Committee on
Foreign Investment in the United States), which is a
process here in the U.S. that looks at foreign
investment in a U.S. company. We will go through the
typical antitrust, Hart-Scott-Rodino reviews, that
will look to see whether there are any antitrust
considerations here. Our objective is to get to
closure as quickly as possible. We said six to 12
months. Six is better than 12. That's a function of
all the filings and all the work that our teams will
have to do in terms of getting this approval.

Now what we've got to do, obviously, while that's
going on, is we've got to begin to do transition
planning and distinguish planning from execution. It
would be my goal that we do as much planning as we
can between now and close with a full-time planning
team. And then on the day we close, we're ready to
start executing and implementing the integration
plan. That would be ideal where there's clarity
around who's in what job, who's in charge, what are
the things that have to be done? We will have a set
of milestones along the way from a planning
standpoint to get us up to closing and then we will
have yet another set of critical integration
milestones that we'll all be running against as we
actually are a combined company. Our shareowners
need to approve this. So we will have to call a
shareowners' meeting, and we will have to present
the case and let the shareowners vote on this
transaction as will Alcatel.
(Russo, All-Employee Broadcast, 4-4-06)

As you go through the integration and
all the work that you have to do between now and
close, what's the biggest challenge? Or do you even
see a concern as you're going through the
integration and a process to get us to the close?
Are you going to be in a quiet period, or how much
are you going to be communicating to the employees,
or how frequently will we know where we are in the
process of going towards the close?

This
is a massive job of integrating two companies. We
are two very large global companies, and we have a
lot of work to do to get these companies combined,
and even after close, it will take awhile before
you're truly integrated as one company. Our
expectations shouldn't be, Day 1, everything is
integrated, systems are integrated. It generally
doesn't work that way.

Having said that, I've seen what the people in
this company, and I think the Alcatel folks would
tell you, what they've done, as we've weathered the
storm and made the changes we've made. We've gone
through radical change, as a company since our birth
as Lucent. I think we have incredibly smart people.
Incredibly dedicated people. So, are we up to the
task? We're absolutely up to the task. There's no
question in my mind. And from what I observed, the
ability to communicate with each other, understand
each other, collaborate around what's going on in
the industry, and reach a good business decision, I
have confidence we'll be able to do that. Every
function of every company has to be looked at. We
have a lot of work to do. We're up to it. We just
need to plan for it and manage it well.
(Russo, All-Employee
Broadcast, 4-4-06)

The assumption out of the chute is we can plan
and plan and plan — we just can't implement the
plans. But I want to just come back to the question,
which is, what are we most concerned about? Let me
tell you what I'm most concerned about. Even despite
that massive effort that we got to do on
integration, we're still two separate companies. We
have to execute flawlessly, our own plans, and
between now and when this deal closes. So what does
that mean? Today's April the 4th, you know, we're
right at the beginning of Q3. We need to have a
terrific Q3, and then we need to have a terrific Q4.
As a company, we didn't have a terrific Q1. And
we're going to report on Q2 in a couple of weeks, so
I can't comment on that. (D'Amelio,
All-Employee Broadcast, 4-4-06)

But, what's most incumbent upon us right now is,
to deliver on our plan. To deliver on the Q3 plan.
To deliver on the Q4 plan. Because we want to make
sure we stay strong over the remainder of the fiscal
year, regardless of what we're doing on the merger
side.

We've got to execute our plans as they exist.
And, 99 percent of the people in the company need to
be doing that, while we have a transition planning
team working on the transition; reaching into the
organization as appropriate, but we've got to keep
separate running and executing our business from
planning for this transaction. That will give us the
greatest chance of near-term success, which we need
— and then longer-term success, which obviously we
expect. But we've got to stay focused on our plans
at-hand, and execute on them.
(Russo, All-Employee
Broadcast, 4-4-06)

What happens to Alcatel and Lucent if,
after announcing their intention to merge, the deal
falls through?

We will work closely with
the regulatory bodies in both the U.S. and Europe to
obtain the necessary clearances. Both companies will
operate independently until the merger is completed.
If the merger is not completed, both companies are
prepared to continue with their separate strategies
for success. (Company
response, 4-2-06)

What are the major legal milestones of
the whole process?

As is typical with
these types of transactions, there are four major
milestones that must be achieved before the closing:

Legal filings (prospectus) with the SEC in
the US, and AMF (Document E) in France (several
months)

Antitrust filings both in the U.S. and
European Union and certain other jurisdictions

Approval by CFIUS (Committee on Foreign
Investment in the United States)

Approval by shareowners of both companies
(cannot occur before the legal filings): 2/3
vote from Alcatel shareowners, and simple
majority of Lucent shareowners
(Company response,
4-2-06)

When will Lucent and Alcatel hold their
respective General Shareowner Meeting?

The shareowner meeting could occur before antitrust
and CFIUS clearance, but after SEC and AMF clearance
is achieved. (Company
response, 4-2-06)

Name and Logo

Will we get a brand-new name? Is it
going to be a combination of the current names? And
how are we going to go about this process?

We will determine what the name is at a later date.
You shouldn't conclude from that it won't be some
combination of names today, or that it will in fact
be a new name. I think we have some work to do to
look at the brand equity. Because both companies
have equity in the brand around the world. There are
parts of the world where Alcatel's brand equity is
stronger than ours because they do business much
more significantly in a part of the world than we
do, and vice versa.

It will be something that is either a combination
or a new name, and that'll really be informed by
what's the cost of creating new equity, versus the
value of leveraging current equity? I do know that
Bell Labs, and the name Bell Labs, Bell Labs
Innovation, or Bell Labs Research and Innovation,
clearly has value, and I would expect we're going to
continue to want to find a way to leverage that. And
then we'll have to determine from that, do we change
the stock ticker or not?
(Russo, All-Employee Broadcast, 4-4-06)

A joint working group will be created to work on
these topics so that name and logo of the new
company can be revealed at closing date.
(Company response, 4-2-06)

We've called this a "merger of equals,"
is it safe to assume that we'll have a new name and
we won't take Alcatel or Lucent?

What I
would say based on that question, the answer is
"no." The reason I said "no" is Lucent and Alcatel
both have lots of brand value today, depending on
the marketplace that you're in. For example, in
North America, Lucent has great brand value, great
brand recognition. And in Europe, Alcatel has great
brand recognition. One of the things that we're
looking at, is there a way to not necessarily do an
"or," but to do an "and," and try to maximize the
value that both brands bring. We're looking at all
of our alternatives. (D'Amelio,
Town Meeting, 4-3-06)

Stock Listings

Where will the new entity be listed?

The combined entity will continue to be primarily
listed on Paris Euronext and the New York Stock
Exchange (NYSE). (Company
response, 4-2-06)

In which indexes will the new company be
listed? Do you expect the new company to be listed
in the S&P500?

The combined company will
conduct discussions with the respective listing
agencies to determine the index/indices in which it
will be included. The combined company will most
likely not be listed on the S&P because Non-U.S.
companies are not permitted to be listed on this
index. (Company response,
4-2-06)

Synergies

What are the expected synergies (cost
reductions, leveraging Alcatel, leveraging Lucent)
and when do you expect to achieve them?

We've mutually identified annual pre-tax cost and
expense synergies of approximately €1.4 billion /
$1.7 billion within three years, a substantial
majority of which will be achieved in the first two
years. The net present value (NPV) of cost synergies
are approximately €10 / $12 billion.

The synergies are expected to come from several
areas, including:

Consolidating support functions

Optimizing the supply chain and procurement
structure

Leveraging R&D and services cross a larger
base

We will look at several things, such as the
impact on our customers if we make any changes,
which product or technology has the most promise
going forward, what areas are likely to have the
most growth, the investments required, etc.
(Company response, 4-2-06)

Financial Reporting

What are the expected restructuring
costs (P&L and cash and non-cash)?

The
merger will also result in approximately €1.4
billion / $1.7 billion in new cash restructuring
charges, with the charges to be recorded primarily
in the first year. We expect a substantial majority
of the restructuring to be completed within 24
months after closing. We will record non-cash
restructuring charges for items such as the
amortization of intangible assets, which we are
currently calculating.
(Company response, 4-2-06)

Will the combined company report under
IFRS or US GAAP?

The combined company
will continue to adhere to the prevailing securities
laws. We will have to report under International
Financial Reporting Standards, or IFRS, because the
combined company will be incorporated in France.
However, for the combined company to be a "foreign
private issuer", the corporation incorporated under
the laws of any foreign country must NOT meet the
following two conditions:

More than 50 percent of its voting
securities are directly or indirectly held of
record by residents of the United States; and

Any one of the following applies:

The majority of the executive officers
or directors are U.S. citizens or residents,

More than 50 percent of the assets of
the issuer are located in the U.S., or

The business of the issuer is
administered principally in the U.S.

(Company response, 4-2-06)

What will be the accounting period for
the combined company?

The fiscal year or
accounting period will begin on January 1st and end
on December 31st of the calendar year.
(Company response, 4-2-06)

Will there be a financial reserve put
aside — like Lucent's previous restructuring efforts
— by Lucent/Alcatel for areas like but not limited
to: personnel (management & occupational)
reductions, real estate consolidations/reductions,
and system mergers, reductions and purchases?

The merger will result in approximately $1.7 billion
in new cash restructuring charges, with the charges
to be recorded primarily in the first year.
(5-8-06)

Bell Labs

What will the new R&D organization look
like — size, headcount, patents?

The
combined R&D currently will have more than 26,100
scientists and engineers with an unmatched
innovation strength, leading in all the critical
technologies for the future: broadband access both
wired and wireless, optical flexible networking,
service aware IP routing, NGN and IMS, open service
delivery solutions, added value carrier grade
applications and scaleable OSS.

The combined company will own more than 25,000
patents registered all around the world and covering
the technologies critical for communication
solutions. We expect the organization will continue
and even expand its filing rate of more than 1,400
patents/year. (Company
response, 4-2-06)

Will Bell Labs keep its name?

Yes. (Company response,
4-2-06)

Can you talk a little bit about the Bell
Labs scenario?

One of the areas we've got
to work through as part of the merger is certain
projects for the government, which would include
Bell Laboratories. One of the things we're looking
at is a separate U.S. subsidiary, where we would put
those certain projects. It will have three, U.S.
citizen board members we will nominate, that need to
be approved by the U.S. government. One is Bill
Perry, who was a former Secretary of Defense. One is
James Woolsey, who is a former director of central
intelligence. And the last one is Kenneth Minahan,
who's a former director of the National Security
Council. (D'Amelio, Town
Meeting, 4-3-06)

Are we going to divide any part of Bell
Labs and move it to France? What does it mean for
the work we're doing with the U.S. government? Will
we get resistance from the U.S. government for the
work that Bell Labs does, and how are we going to
manage that?

Bell Labs, the headquarters
of Bell Labs, what Bell Labs is, remains unchanged.
In fact, my hope is that we are able to expand what
Bell Labs is and looks like around the world from a
research standpoint. Alcatel has Alcatel research
and innovation. And they have core research that
they do, and they have research centers around the
world. So I envision that this is an opportunity to
do more from a research standpoint together than
either of us could do separately. We have no
intention of dividing up Bell Labs, moving Bell Labs
or not having Bell Labs be headquartered exactly
where it is.

With respect to the sensitive U.S. government
work, we have arranged for a structure that is a
separate U.S. subsidiary headed by a proxy board.
Three outstanding, impressive individuals have
agreed to serve on the proxy board — that's a very
typical mechanism used when you have a combination
of U.S. and non-U.S. interests associated with a
company. We have to get approvals.
(Russo, All-Employee
Broadcast, 4-4-06)

What will happen to the work and
contracts that Bell Labs does for the U.S.
government?

The combined company intends
to form a separate, independent U.S. subsidiary
holding certain contracts with U.S. government
agencies. This subsidiary would be separately
managed by a board, to be composed of three
independent U.S. citizens acceptable to the U.S.
government. This type of structure is routinely used
to protect certain government programs in the course
of mergers involving non-U.S. parties.
(Company response, 4-2-06)

Is Lucent engaged in classified projects
for the U.S. government?

Lucent does a
broad range of projects for the federal government,
but beyond that we would not comment on the details
of customer relationships.
(Company response, 4-2-06)

Is Alcatel engaged in classified
projects for either French or U.S. governments?

Alcatel does a broad range of projects for the
French government, but beyond that we would not
comment on the details of customer relationships.
(Company response, 4-2-06)

Will the U.S. government object to
having one of its premier research institutions
owned by a company incorporated in another country?

We wouldn't speculate on the reaction of the U.S.
government. That said, we will work closely with the
U.S. government to obtain the necessary clearances.
We are confident that we will be successful.
(Company response, 4-2-06)

Sarbanes-Oxley

My question is related to internal
controls and operations. I'd like to know if you can
share with us what systems are used at Alcatel to
manage their internal business operations? And if
there are any controls or regulations used or
required, similar to what we do in the U.S. in
support of Sarbanes-Oxley?

On the whole
governance model relative to Sarbanes-Oxley, we had
a thorough, exhaustive due diligence effort and we
are comfortable with our governance model. We are
comfortable with, through our due diligence process,
through many discussions with their senior folks in
this area, what we do today, what they do today, and
then how it'll come together post-merger.

And then in terms of their systems, they clearly
have a systems environment that's good, but like
ours, can be improved. They have some systems very
similar to some of the things we do. But systems in
general, for both companies, are clearly an area of
opportunity as we go forward.
(D'Amelio, Town Meeting,
4-3-06)

Lucent Real Estate

Will things still remain the same with
Lucent Real Estate Service?

In terms of
service levels, I don't see any changes in service
levels. There is clearly going to be rationalization
work that will need to be done across all functions
that will include facilities. So there will be
rationalization work that needs to be done. But in
terms of service levels, I don't see any major
changes to service levels at this point.
(D'Amelio, Town Meeting,
4-3-06)

Manufacturing

Does Alcatel support an insourcing or
outsourcing model?

I'm assuming you mean
manufacturing — for the most part, they do their own
manufacturing. Most of our manufacturing is
outsourced, and most of their manufacturing is done
by their own factories. So that's clearly an area
where we'll have to work our way through what's the
right model. And by the way, on many of these items,
we shouldn't get caught up in an "or." In many of
these, the answer may be "and." It doesn't have to
be insourcing or outsourcing; it could be insourcing
and outsourcing. It turns out, they get some
interesting benefits from having their own
manufacturing that we haven't had access to.

Because they have a lot of their own local
content, in places like France, Germany and China,
they get access to some export financing that we
haven't been able to get access to for customer
financing. So there are some interesting benefits
from their model that we'll obviously need to study
as we work our way forward.
(D'Amelio, Town Meeting, 4-3-06)

What percentage of Alcatel's
manufacturing is outsourced? Who does Alcatel
outsource to?

To date, Alcatel has
outsourced around half of its manufacturing, but
continues to integrate and test internally many of
these products. Alcatel mainly outsources to
Flextronics, Jabil and Sanmina.
(Company response, 4-2-06)

Where are Alcatel's main manufacturing
facilities?

Alcatel main manufacturing
facilities are located in France, Italy, Belgium,
China, Mexico and the U.S.A.
(Company response, 4-2-06)

Structure of the New Company

Where will the company be incorporated?
Where will it be based?

The company will
be incorporated in France, with executive offices
located in Paris. The North American operations will
be based in New Jersey, U.S.A., where global Bell
Labs will remain headquartered.
(Company response, 4-2-06)

Why will the merged company be
headquartered in France?

When you merge
companies, you want to make sure you maximize every
element of value creation. Just to start at a macro
level. The reason we chose France as where we wanted
the company to be incorporated, is because it
maximizes our tax value. We, both companies, have
significant deferred tax assets, significant net
operating losses (NOL), and it turns out, when you
look at the various tax laws of the different
countries, France was the most favorable for the
combined companies. (Frank
D'Amelio, Town Meeting, 4-3-06)

What will the business segments look
like?

This will be announced at the deal
closing. (Company response,
4-2-06)

Portfolio

There is bound to be some overlap in our
product lines. Do we expect to rationalize some of
our product lines? Which ones?

A major
rationale for this merger is the synergies that will
naturally flow from it. We will undertake a rigorous
technology-by-technology, product-by-product review
of both portfolios. We will look at several things,
such as the impact on our customers if we make any
changes, which product or technology has the most
promise going forward, what areas are likely to have
the most growth, the investments require, etc.
(Company response, 4-2-06)

What will the combined portfolio look
like?

The combined company will be a
leader in all major high growth, next-generation
areas — No. 1 or No. 2 in all key areas of
next-generation networks.
(Company response, 4-2-06)

2001 Merger Discussions with Alcatel

I know back in 2001, we started
negotiations with Alcatel. And I'd like to know what
failed then, and what changed in subsequent years,
besides the obvious growth of both companies? What
made you feel this time around it could be
successful?

I wasn't here in 2001, so
I'll defer to Frank, who was here. I will tell you
what Serge said yesterday when asked: "The
mayonnaise just didn't stick." My view is, it just
wasn't right. Things didn't come to closure in a way
that both sides felt good about. And in the end,
that's what you need to do. When you put a deal like
this together, it's a matter of what are you willing
to compromise, what are you willing not to
compromise? How compelling is the vision and the
opportunity? And that really informs your ability to
get something done. I think we reached an agreement
that's compelled by the possibilities we can create
together, and we were able to work out the things
that were important from our side and from their
side. (Russo, All-Employee
Broadcast, 4-4-06)

I think the fine wine wasn't ready to be consumed
back in 2001. And then you all have heard me talk
about our continuum as a company, about survive,
stabilize, thrive. Back then, the whole industry,
including both companies, was very much in what I'll
call survival mode. And we got into philosophical
differences about where each company was respective
to that continuum. So I think it was nothing more
than the timing wasn't right.
(D'Amelio, All-Employee
Broadcast, 4-4-06)

About Alcatel

Can you provide a brief history of
Alcatel?

Alcatel has its roots in the
late 19th century as the publicly owned Compagnie
Genereale d'Electricité, but it became a
telecommunications specialist when it combined with
the bulk of ITT's telecom business in 1987, about 20
years ago. The international character of the
company dates from that deal and was subsequently
reinforced with significant later acquisitions such
as different acquired companies, such as Rockwell
(U.S.) in 1991, Teletra (Italy) in 1992, Nortel
Submarine & Cables (U.K.) in 1994, DSC (U.S.) in
1998, Genesys (U.S.) and Newbridge Networks (Canada)
in 2000, and Timetra (U.S.) in 2003, to name the
most important. Furthermore, Alcatel also benefits
from a significant position in China thanks to its
long-lasting presence in that country since 1983 and
its flagship subsidiary ASB.
(Company response, 4-2-06)

What kind of presence does Alcatel have
in North America? What are its North American
revenues?

It has some 9,000 employees in
North America. Alcatel's North American revenues by
subsidiary location in 2005 were €1.9 billion / $
2.3 billion, which represents more than 14 percent
of Alcatel 2005 revenues.
(Company response, 4-2-06)

Alcatel has a major presence in North America,
with main locations in Texas, California and Canada.
(Company response, 4-2-06)

Investor Information

The Transaction

What is the structure of the
transaction?

It's a stock-for-stock
merger with a fixed exchange ratio of 0.1952 of a
new company ADS (American Depositary Share)
representing ordinary shares of Alcatel (as the
combined company) for every common share of Lucent
except that a cash payment will be made in lieu of
any fractional interest in an Alcatel ADS. Upon
completion of the merger, Alcatel shareholders will
own approximately 60 percent of the combined company
and Lucent shareholders will own approximately 40
percent of the combined company. In legal terms, the
deal is structured as a reverse triangular merger,
after which Lucent will be a subsidiary of Alcatel,
and Lucent shareowners will receive Alcatel ADSs in
exchange for Lucent shares except that a cash
payment will be made in lieu of any fractional
interest in an Alcatel ADS. These structures are
common in mergers of this type and most mergers
involving US public companies are done this way.
(Company response)

What is an ADS?

An American
Depositary Share, or ADS (represented by an American
Depositary Receipt), is a negotiable U.S. depositary
receipt, which usually represents an existing
outstanding class of equity shares in a non-U.S.
company. ADSs trade freely, just like any other
security; investors can purchase and hold ADSs
through full-service, discount, and on-line
brokerage firms throughout the United States. For
example, Alcatel ADS' trade on the NYSE under the
symbol ALA. (Company
response, 4-2-06)

Impact on Stock

How will the merger affect my Lucent
stock?

Lucent shareowners will receive
0.1952 of an ADS (American Depositary Shares) for
every common share of Lucent that they currently
hold except that a cash payment will be made in lieu
of any fractional interest in an Alcatel ADS. Each
ADS represents one ordinary share of Alcatel (as the
combined company). The combined company's ordinary
shares will be traded on the Euronext Paris and the
ADS will be traded on the New York Stock Exchange.
No action will be required by you until after the
closing of the merger. Following the closing, you
will receive instructions from Lucent regarding the
exchange of your shares.

How many shares will be issued?

Roughly 881 million shares will be issued.
(Company response, 4-2-06)

How many shares of stock does each
company currently have outstanding?

As of
December 31, 2005:

Alcatel: 1,370 million basic shares
outstanding

Lucent: 4,469 million basic shares
outstanding

(Company response, 4-2-06)

Will this merger transaction be taxable
to shareholders?

The merger is not
anticipated to be a taxable event (except with
respect to cash received in lieu of any fractional
interest in an Alcatel ADS) since it is a
stock-for-stock transaction. However, you should
consult your tax advisor regarding your particular
situation. (Company
response)

Will there be a cash payment or cash
option for Lucent shares from Alcatel? How much will
it be?

There will be no cash payment from Alcatel. After
the merger is approved and closed, for each share of
Lucent common stock, Lucent shareholders will
receive 0.1952 of an Alcatel ADS except that a cash
payment will be made in lieu of any fractional
interest in an Alcatel ADS and will become
shareholders of the combined company. No action will
be required by you until after the closing of the
merger. Following the closing, you will receive
information from the new company regarding the
exchange of your shares.
(Company response)

Is it better just to sell all of my
Lucent shares now?

Whether to buy or sell
stock is a personal decision. We recommend you
consult your investment advisor.
(Company response, 4-2-06)

Will shareholders be asked to turn in
their certificates? If so, when?

We
expect the merger to close within approximately 6-12
months. If the merger is effected, shareholders who
hold shares in certificated form will be required to
submit their certificated shares in order to receive
shares of the new company. In order to expedite the
eventual transaction, we suggest you mail your
certificate(s) in for deposit into Direct
Registration Form. When mailing certificates we
suggest insuring the package for a minimum of $25 or
2 percent of the value of the shares, whichever is
greater. (Company response,
4-2-06)

Who will be the transfer agent for the
new company?

The Bank of New York will
remain as the transfer agent for Lucent until the
closing of the transaction. After the closing, the
new company will work with the transfer agent that
best suits its business needs.
(Company response, 4-2-06)

SAFE HARBOR FOR FORWARD LOOKING
STATEMENTS AND OTHER IMPORTANT INFORMATION

This website and other employee communications
material contain statements regarding the proposed
transaction between Lucent and Alcatel, the expected
timetable for completing the transaction, future
financial and operating results, benefits and synergies
of the proposed transaction and other statements about
Lucent and Alcatel's managements' future expectations,
beliefs, goals, plans or prospects that are based on
current expectations, estimates, forecasts and
projections about Lucent and Alcatel and the combined
company, as well as Lucent's and Alcatel's and the
combined company's future performance and the industries
in which Lucent and Alcatel operate and the combined
company will operate, in addition to managements'
assumptions. These statements constitute forward-looking
statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Words such as
"expects," "anticipates," "targets," "goals,"
"projects," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words and similar
expressions are intended to identify such
forward-looking statements which are not statements of
historical facts. These forward-looking statements are
not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult
to assess. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted
in such forward-looking statements. These risks and
uncertainties are based upon a number of important
factors including, among others: the ability to
consummate the proposed transaction; difficulties and
delays in obtaining regulatory approvals for the
proposed transaction; difficulties and delays in
achieving synergies and cost savings; potential
difficulties in meeting conditions set forth in the
definitive merger agreement entered into by Lucent and
Alcatel; fluctuations in the telecommunications market;
the pricing, cost and other risks inherent in long-term
sales agreements; exposure to the credit risk of
customers; reliance on a limited number of contract
manufacturers to supply products we sell; the social,
political and economic risks of our respective global
operations; the costs and risks associated with pension
and postretirement benefit obligations; the complexity
of products sold; changes to existing regulations or
technical standards; existing and future litigation;
difficulties and costs in protecting intellectual
property rights and exposure to infringement claims by
others; and compliance with environmental, health and
safety laws. For a more complete list and description of
such risks and uncertainties, refer to Lucent's annual
report on Form 10-K for the year ended September 30,
2005 and quarterly reports on Form 10-Q for the periods
ended December 31, 2005 and March 31, 2006 and Alcatel's
annual report on Form 20-F for the year ended December
31, 2005 as well as other filings by Lucent and Alcatel
with the U.S. Securities and Exchange Commission (the
"SEC"). Except as required under the U.S. federal
securities laws and the rules and regulations of the
SEC, Lucent and Alcatel disclaim any intention or
obligation to update any forward-looking statements
after the distribution of this website and other
employee communications material, whether as a result of
new information, future events, developments, changes in
assumptions or otherwise.

IMPORTANT ADDITIONAL INFORMATION FILED WITH THE SEC

In connection with the proposed transaction between
Lucent and Alcatel, Alcatel has filed a registration
statement on Form F-4 (File no. 33-133919) (the "Form
F-4") to register the Alcatel ordinary shares underlying
the Alcatel American Depositary Shares ("ADS") to be
issued in the proposed transaction. Alcatel and Lucent
have also filed, and intend to continue to file,
additional relevant materials with the SEC, including a
registration statement on Form F-6 (the "Form F-6" and
together with the Form F-4, the "Registration
Statements") to register the Alcatel ADSs to be issued
in the proposed transaction. The Registration Statements
and the related proxy statement/prospectus contain and
will contain important information about Lucent,
Alcatel, the proposed transaction and related matters.
Investors and security holders are urged to read the
Registration Statements and the related proxy
statement/prospectus carefully, and any other relevant
documents filed with the SEC, including all amendments,
because they contain important information. Investors
and security holders may obtain free copies of the
documents filed with the SEC by Lucent and Alcatel
(including the Form F-4 and, when filed, the Form F-6)
through the web site maintained by the SEC at
http://www.sec.gov/. In addition, investors and
security holders may obtain free copies of materials
filed with the SEC by Lucent and Alcatel (including the
Form F-4 and, when filed, the Form F-6) by contacting
Investor Relations at
http://www.lucent.com/, by mail to 600 Mountain
Avenue, Murray Hill, New Jersey 07974 or by telephone at
908-582-8500 and from Alcatel by contacting Investor
Relations at
http://www.alcatel.com/, by mail to 54, rue La
Boétie, 75008 Paris, France or by telephone at
33-1-40-76-10-10.

Lucent and its directors and executive officers also
may be deemed to be participants in the solicitation of
proxies from the stockholders of Lucent in connection
with the transaction described herein. Information
regarding the special interests of these directors and
executive officers in the transaction described herein
is included in the Form F-4 (and will be included in the
definitive proxy statement/prospectus for the proposed
transaction). Additional information regarding these
directors and executive officers is also included in
Lucent's proxy statement for its 2006 annual meeting of
stockholders, which was filed with the SEC on or about
January 3, 2006. This document is available free of
charge at the SEC's web site at
http://www.sec.gov/ and from Lucent by contacting
Investor Relations at
http://www.lucent.com/, by mail to 600 Mountain
Avenue, Murray Hill, New Jersey 07974 or by telephone at
908-582-8500.

Alcatel and its directors and executive officers may
be deemed to be participants in the solicitation of
proxies from the stockholders of Lucent in connection
with the transaction described herein. Information
regarding the special interests of these directors and
executive officers in the transaction described herein
is included in the Form F-4 (and will be included in the
definitive proxy statement/prospectus for the proposed
transaction). Additional information regarding these
directors and executive officers is also included in
Alcatel's annual report on Form 20-F filed with the SEC
on March 31, 2006. This document is available free of
charge at the SEC's web site at
http://www.sec.gov/ and from Alcatel by contacting
Investor Relations at
http://www.alcatel.com/, by mail to 54, rue La
Boétie, 75008 Paris, France or by telephone at
33-1-40-76-10-10.